DHS Considering Use of Bitcoin at the Border

The U.S. Department of Homeland Security (DHS) is said to be looking into ways it might be able to apply the potential of blockchain technology – the centralized-but-decentralized ledger system underpinning “crypto-currencies” – digital, non-fiat forms of currency built around complex encryption algorithms – such as Bitcoin.

In the case of Bitcoin, blockchain technology “helps the currency simultaneously balance security, anonymity and fiscal stability. The blockchain is ‘centralized’ in that it serves as a ledger by which digital transactions—say, sending a single bitcoin to an online vendor—are tracked to ensure that, for example, the bitcoin is actually yours and not a digital copy. But the ledger is also ‘decentralized,’ in that it’s distributed widely and open to the public, allowing no single party or group to game the system. The result is an ostensibly open, transparent system of currency.”

But the applications of the technology underlying the currencies also holds promise for other applications in which increased transparency is desirable.

Specifically, DHS is interested in applying the transparent ledger structure to operations on the American border. CBP Trade Transformation Officer Director Vincent Annunziato said he is “cautiously optimistic” about the technology making its way into the field, but noted the conversations are likely to be longer-term, saying he “wouldn’t want to jump in” too soon, but is instead looking at applications three-to-ten years in the future.

The agency’s curiosity about the technology’s potential is one example of a recent spike in the American government’s interest in the blockchain, a trend evidenced by the General Services Administration’s recent workshop on the technology. The United States joins a number of other countries who, in recent years, have begun applying blockchain solutions to previously intractable problems. The technology’s rise in popularity has coincided with Bitcoin’s historic rise in value – from nearly zero in 2013 to just shy of $7,200 per bitcoin as of this writing.

Subscribe!

This Week on FEDtalk

On the August 3rd episode of FedTalk on Federal News Radio, join host Tony Vergnetti and Michael Livingston from the Livingston Financial Group to hear about important financial planning strategies for all federal employees to consider.